IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1301:

  Formal written policies are normally recommended. However, the presence of certain condition in an organization minimizes the need for written policies. One condition that minimizes the need for written policies is a?

  A. High division of labor

  B. Strong organizational culture.

  C. Large span of control.

  D. Strict unity of command.

  Correct Answer: B

  If the culture is strong, the organization's key values are intensely held and widely shared. Substantial training has been expended to achieve this high degree of acceptance, minimizing the need for formal, written policies.

• Question 1302:

  The management of an organization has stated that two members of the same family may not be employed in the same department. Identify the component of organization planning that is being demonstrated by management's action.

  A. A strategy

  B. A policy

  C. An objective

  D. A mission statement.

  Correct Answer: B

  Top management establishes policies as guides to middle- and lower-management decision making. Policies are relatively broad guidelines for making routine decisions consistent with overall objectives or goals. They channel thinking in a certain direction but allow for some managerial discretion.

• Question 1303:

  Policies and procedures provide guidance to management and employees. Would policies and procedures normally be found for the senior management of a multinational organization?

  A. Yes, all policies and procedures are developed by senior management.

  B. No, senior management develops policies and procedures for lower levels only.

  C. Yes, policies and procedures are used throughout an organization's ranks.

  D. No, only middle managers and below develop and use policies and procedures.

  Correct Answer: C

  Research has shown that policies and procedures are referred to by all levels of management on an as-needed basis.

• Question 1304:

  A firm's statement of broad objectives or mission statement should accomplish all of the following except?

  A. Outlining strategies for technological development, market expansion, and product differentiation.

  B. Defining the purpose of the company.

  C. Providing an overall guide to those in high-level, decision-making position.

  D. Stating the moral and ethical principles that guide the action of the firm.

  Correct Answer: A

  The determination of organizational objectives is the first step in the planning process. A mission statement is a formal, written document that defines the organization's purpose in society, for example, to produce and distribute certain goods of high quality in a manner beneficial to the public, employees, shareholders, and other constituencies. Thus, a mission statement does not announce specific operating plans. It does not describe strategies for technological development, market expansion, or product differentiation because these are tasks for operating management.

• Question 1305:

  Which one of the following managements consideration is usually addressed first in strategic planning?

  A. Outsourcing.

  B. Overall objective of the firm.

  C. Organizational structure

  D. Recent annual budgets.

  Correct Answer: B

  Strategic planning is the process of setting overall organizational objectives and drafting strategic plans. It is a process of long-term planning. Setting ultimate objectives for the firm is a necessary prelude to developing strategies for achieving those objectives. Plans and budgets are then needed to implement those strategies.

• Question 1306:

  Vasil, Inc. conducted a strategy self-assessment of factors contributing to market attractiveness and business strengths as follows: The factor ratings range from 1 (the lowest) to 5 (the highest). Which one of the following strategies would be the most beneficial for Vasil?

  

  A. Build selectively on strengths.

  B. Upgrade product line.

  C. Focus on attractive segments.

  D. Avoid investments.

  Correct Answer: A

  Vasil can quantify the results of its strategic self-assessment by weighting and summing each rating.

• Question 1307:

  A manufacturing company produces plastic utensils for a particular segment at the lowest possible cost. The company is pursuing a cost?

  A. Leadership strategy

  B. Focus strategy

  C. Differentiation strategy

  D. Containment strategy

  Correct Answer: B

  A cost focus strategy aims at cost leadership in a particular segment, such as a regional market or a specialty product line. The rationale for a focus strategy is that the narrower market can be better served.

• Question 1308:

  Which basic force(s) drive (s) industry competition and the ultimate profit potential of the industry?

  I. Threat of new entrants.

  II. Bargaining power of suppliers.

  III. Favorable access to raw materials and labor.

  IV.

  Product differentiation

  A.

  I only

  B.

  I and II only

  C.

  III and IV only

  D.

  I, II, III, and IV

  Correct Answer: B

  Threat of new entrants and bargaining power of suppliers are among the five basic forces that drive industry competition and the ultimate profit potential industry. This potential is measured in terms of longterm return on invested capital. The other three forces are rivalry among existing firms, threat substitutes and threat of buyers' bargaining power.

• Question 1309:

  Which of the following is a favorable condition for a firm competing in profitable, expanding industry?

  A. The firm does not have a strong customer base.

  B. A few suppliers who can restrict supply.

  C. Competitors find it difficult to acquire the firm's customers.

  D. The firm has high costs relative to other firms in the industry.

  Correct Answer: C

  A firm that has successfully differentiated its products through developing a desirable image, better services, cost leadership, the features of the product, or other means is in a favorable competitive position Competitors find it difficult to acquire the firm's customers, for example, by price cutting. The reason is that the firm's products are perceived to have few substitutes, and brand loyalty is high. Futhermore, barriers to entry are favorable to the firm. These barriers deter competitors from entering the market. Existing firm can increase market share and emphasize cutting costs and increasing value?

• Question 1310:

  The concurrent action of basic competitive force as defined by Porter's model determines?

  A. The long-tem profitability and the competitive intensity of the industry.

  B. The entrance barriers that potential players must face to get into the industry.

  C. The rivalry inside the industry.

  D. The strategy that a firm should follow to achieve its objectives.

  Correct Answer: A

  Michael E. Porter, a leader in the field of strategic management, has developed a comprehensive model of the structure of industries and competition. One feature is his analysis of the five competitive forces that determine long-term profitability measured by long-term return on investment. This analysis determines the attractiveness of an industry.